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Grassley, Dorgan withdraw latest payment limit amendment

In what’s becoming an almost annual rite of spring, Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., once again introduced legislation that would limit farm program payments to $250,000 per individual per year.

But the senators withdrew the amendment in the face of opposition from a number of farm groups on March 22. It appeared the amendment faced a close vote even though it would not have been binding on the Senate Committee on Agriculture, Nutrition and Forestry when it writes a farm bill later this year.

Currently, farmers can receive up to $360,000 annually through a combination of direct ($80,000), counter-cyclical ($130,000) and marketing loan gains ($150,000). The three-entity rule also allows farmers to participate in and receive payments in additional farming operations.

In previous amendments, Dorgan and Grassley have advocated eliminating the three-entity rule and reducing the payment limits for direct, counter-cyclical and marketing loan gains so that no individual farmer can receive more than $250,000.

The savings from the amendment – an estimated $486 million over five years and $1.07 billion over 10 years – would be applied in equal amounts to renewable energy/rural development, conservation and nutrition programs, according to Grassley.

“This amendment makes perfect sense,” he said. “This proposal has always been popular, and the reality is that with 72 percent of the payments going to 10 percent of the farmers, we’ve got a serious problem on our hands.”

Grassley offered the legislation as an amendment to the Senate Budget Resolution, S. Con. Res. 21, which will set parameters for the federal budget for fiscal year 2008 and the budget levels for fiscal years 2007 and 2009 through 2012.

Farm groups such as the USA Rice Federation said calls to senators voicing opposition to the bill helped persuade the authors to withdraw the measure.

“USA Rice thanks all of its members and friends who contacted their senators to oppose the Grassley-Dorgan amendment,” said USA Rice Producers’ Group Chairman Paul T. Combs. “We deeply appreciate those rice-state senators who responded to the industry’s calls and emails by expressing their concerns, all of which contributed in a major way to the amendment’s withdrawal.”

“There will be a debate on payment limits when the farm bill comes before the House and Senate, but the budget resolution was not the appropriate vehicle for raising the issue,” Combs added.

The amendment’s authors have had varying degrees of success with their payment limit amendments over the years. The Senate passed the Grassley-Dorgan legislation in the version of the 2002 farm bill it initially reported. But the language was omitted from the House-Senate farm bill conference report that Congress passed in May 2002.

In 2005, the Senate refused by a vote of 53-46 to add the language to the budget reconciliation bill it passed for the 2006 fiscal year.

Grassley said the latest amendment “is good policy and a nice way to help the Senate agriculture committee dig into the $15 billion in offsets it needs for the farm bill,” referring to the $15 billion reserve fund Senate Budget Committee Chairman Kent Conrad created in the Senate Budget Resolution to help offset a sharp reduction in the budget baseline for agriculture.

Asked to comment on the amendment, House Agriculture Committee Chairman Collin Peterson said it is “nothing new. They’ve introduced the amendment several times now, and, frankly, I think the administration proposal is attracting more attention.” (Agriculture Secretary Mike Johanns recommends lowering the adjusted gross income limit from $2.5 million to $200,000 and eliminating the three-entity rule.)

Although he has said he doesn’t favor reducing payment limits, Peterson repeated earlier comments that the payment limit issue would have to be addressed in the 2007 farm bill. “I don’t think we will be able to stonewall it,” he told reporters in a telephone press conference. “We’re looking at several ideas, but we’re not ready to talk about them.

Meanwhile, organizations such as the Washington-based Sustainable Agriculture Coalition said they endorse the Grassley-Dorgan amendment as a way “to close an array of existing loopholes in order to distribute scarce federal dollars in a more equitable way.”

“Passage of this amendment will send a strong message that Congress is finally prepared to level the playing field for family farmers by limiting the ability of the largest producers to bid land away from smaller and beginning operators,” said Ferd Hoefner, policy director for the Coalition, before Grassley withdrew the amendment.

“Nearly every senator has proposals for conservation or nutrition or renewable energy that would require new farm bill spending, but those proposals will remain just pieces of paper until the serious work of finding funding offsets begins. The Grassley-Dorgan amendment is a common sense, pro-family farmer way to jumpstart that serious work.”